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Your purchasing team finds out a critical drug is on backorder the same way they always do: at the point of ordering. Everything stops. Calls get made. Leadership gets looped in. The clinical team is pulled away from patients to evaluate alternatives. And somewhere in the chaos, your pharmacy pays two or three times the normal contract price for whatever's left on the secondary market.
This is the reactive cycle. And for most health system pharmacies, it plays out dozens of times a year.
Drug shortages aren't an occasional disruption anymore. They're the permanent operating condition of acute care pharmacy. The question isn't whether your organization will be affected. It's whether you'll see the next shortage coming in time to do something about it.
The Structural Problem Behind the Persistent Crisis
It's tempting to chalk drug shortages up to bad luck. A pandemic. A hurricane. A regulatory action on an overseas facility. But the persistence of the problem tells a different story.
The forces driving shortages are structural and they're not going away on their own.
Across many drug categories, the manufacturer base has consolidated to two or even one producer. When that single manufacturer exits the market due to financial pressure, an FDA enforcement action or a quality failure, there's no one to absorb the production gap. The remaining manufacturers don't have spare capacity. One factory. One inspection. A nationwide shortage of a critical drug.
Geography compounds the problem. A substantial share of active pharmaceutical ingredients used in U.S. drugs are sourced from India, the EU and China. COVID-era lockdowns disrupted API flows across the U.S. market. Hurricane Helene knocked a Baxter International IV fluid production facility offline in 2024, creating an acute shortage of a foundational clinical supply.
And then there's duration. According to the U.S. Pharmacopeia's 2025 Annual Drug Shortages Report, the average duration of active drug shortages in 2024 exceeded four years, up from roughly two years in 2019. Eighty-nine percent of 2024's active shortages carried over from 2023. The old ones haven't resolved. They've become part of the permanent operating environment, background noise your team has learned to work around until they can't.
A lower active shortage count isn't the same as a safer supply environment. It's a backlog of unresolved problems, layered under new disruptions.
What the Reactive Model Is Really Costing You
Most health system pharmacies have a shortage management process. It just isn't governed. It's reactive, ad hoc and different every time.
The financial toll of that approach is staggering. A June 2025 Vizient analysis found that U.S. hospitals spent nearly $894 million annually in labor costs alone managing drug shortages, up from $359 million in 2019. That's 20 million hours per year consumed by a problem that, with the right intelligence, could often be anticipated weeks in advance.
The labor cost is significant but it's not the only hit. When shortages hit without warning, pharmacies are forced to buy whatever they can find. Secondary market prices for shorted products can run 200% or more above contract cost, paid under duress with no time to evaluate alternatives or negotiate terms.
The clinical stakes are just as real. When amoxicillin is short, prescribers don't stop prescribing. They shift to broader-spectrum alternatives. At scale, that accelerates resistance development, exacerbates downstream supply pressure on the substitute drugs and increases the overall cost of care. One shortage creates a ripple effect across therapeutic categories, formularies and patient populations.
Faster reactions are still reactions. The goal isn't to shorten your response time. It's to know what's coming before it happens.
What Governed Shortage Management Looks Like
Governed shortage management isn't a policy. It's a system: a continuous, intelligence-driven process that moves shortage response from reactive crisis management to proactive, structured decision-making.
It starts with detecting signals early. It moves through evaluating what those signals mean for your specific formulary. It expands to identifying options before you're forced to act. And it concludes with executing confidently on the best available alternative.
SureCost's Drug Shortage Insights™ is built around exactly that cycle.
Detect: See It Before the FDA Does
Most health systems learn about drug shortages from the FDA's shortage list or from a wholesaler backorder notice. By that point, the shortage is already real. Alternatives are being evaluated across the industry simultaneously and secondary market prices have already moved.
SureCost monitors upstream signals that most health systems never see: vendor availability trends, wholesaler fulfillment rates and proprietary partner network data. The result is early detection of supply disruptions, often up to two months before the FDA officially acknowledges a shortage.
For organizations that depend on high-utilization critical drugs, two months of lead time isn't a nice-to-have. It's the difference between a managed substitution and an emergency.
Evaluate: NDC-Level Precision, Not Drug-Level Noise
A drug-level shortage alert tells you something is wrong somewhere. An NDC-level signal tells you exactly which manufacturer, which formulation and which package size is at risk, and which isn't.
SureCost surfaces shortage status, confidence scores and predicted resolution windows at the NDC level. That precision matters. Your response to a 500 mg capsule from one manufacturer in critical status is different from your response to the same drug in a different formulation sitting at stable. Without that granularity, teams either overreact and stockpile unnecessarily, or underreact and get caught short.
There's another layer worth noting. An NDC that shows stable at the individual level but sits within a product group under stress is a signal most systems will miss entirely. SureCost surfaces that divergence explicitly, flagging risk before it becomes a shortage.
Expand: Your Options, Before You're Forced to Choose
Once you know which NDCs are at risk, SureCost automatically scans your entire vendor network, surfaces equivalent NDCs by product group and therapeutic class and presents alternatives with real-time availability and pricing context.
Critically, the system respects your existing vendor agreements. Primary vendor agreement items are surfaced first, so your default view shows you what's compliant before it shows you what's available on the secondary market. When a shortage becomes critical and you need to move beyond your agreements, that view is one toggle away.
You don't have to choose between compliance and care. You get both, in sequence.
Execute: Act with Confidence, Not Urgency
Confidence scores and predicted resolution windows are what change the calculus.
A shortage with a high confidence score and a protracted resolution window, particularly on a high-utilization critical drug, demands early action: clinical leadership engagement, P&T planning and proactive alternative sourcing. A shortage with a lower confidence score and a short predicted resolution window might warrant watchful waiting and a modest buffer order.
The governed response is different in each case. And it's driven by data, not instinct.
Different organizations have different risk tolerances, and SureCost is built to accommodate that. Some teams want to act at the first signal. Others want higher confidence before they move. The platform supports both approaches, letting your organization define its threshold for action while ensuring the right information is always in front of the right people.
The Intelligence Behind the Platform
Predictive intelligence is only as good as the data behind it.
SureCost's shortage prediction model is built on more than a year of continuous training across data from more than 1,600 pharmacy customers, representing over 10,000 pharmacy professionals. That network effect is a genuine advantage. A model trained on procurement activity, vendor signals and shortage outcomes across every class of trade can identify supply signals that no single health system would ever see on its own.
The model doesn't operate as a black box. Users can see the historical trend data that informs each prediction. Vendors of interest can be pinned for prioritized visibility. The platform surfaces which suppliers across the entire network hold a given NDC, including secondary vendors who may have product available through GPO agreements.
Confidence scores reflect the model's certainty that a disruption will deepen or persist. They're a tool for calibrated decision-making, not a guarantee. SureCost doesn't position them as one. The goal is to give pharmacy leaders the information they need to apply their own clinical judgment before the scramble starts.
Building Organizational Resilience Around Shortage Intelligence
Predictive tools are necessary but not sufficient on their own. What separates pharmacies that benefit from shortage intelligence from those that don't is whether the technology is paired with a formal response framework.
Daley's resilience framework, drawn from the National Academies of Sciences, Engineering, and Medicine, organizes shortage response activities around a foundation of communication, analytics and transparency. The key insight is that analytics isn't a support function. It's the base layer on which everything else depends.
In practice, resilient pharmacy teams do a few things in advance:
- Identify the right tools that surface predictive signals early enough to act on them
- Build substitution protocols and clinical pathways for high-risk products before they're needed
- Establish team roles so that when a shortage is flagged, everyone knows exactly what action to take
- Engage prescribers and clinical teams proactively, because a conversation about an anticipated substitution is far easier than an emergency one
The goal isn't to eliminate shortages, which would require systemic manufacturing and supply chain reform beyond any single organization's control. The goal is to flatten the curve. To reduce the disruption that any given shortage causes to patients and operations by having a plan already in motion when it arrives.
Is Your Organization Ready?
If your team typically learns about shortages at the point of ordering, your shortage management process is reactive. That's where most health systems are today. But the gap between where most organizations are and where the best ones are going is widening. And the cost of staying reactive, in labor, spend premium and patient risk, is measurable.
A few questions worth bringing to your next leadership conversation:
How much staff time does your team spend managing active shortages each week? How do you decide when to act on a potential shortage versus when to wait? Is shortage status information accessible to everyone across clinical and pharmacy leadership who needs it?
If the answers involve shared spreadsheets, informal communication and case-by-case decision-making, your organization is operating reactively. There's a better model available right now.
Looking Ahead
Drug shortages aren't going away. The structural forces driving them, including thin margins, supply chain consolidation, geographic concentration of API manufacturing and chronic underinvestment in generic drug production, aren't going to resolve on their own.
What can change is how your organization prepares for them.
The pharmacies that manage shortages best over the next five years won't be the ones that react fastest. They'll be the ones that see the disruption coming, have options ready and execute on a plan they've already made. That's what governed shortage management looks like. And it's available today.
Read the full white paper: Governing Drug Shortages in Real Time With Predictive Intelligence to see how SureCost's Drug Shortage Insights™ can shift your organization from reactive scrambling to confident, proactive decision-making.
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